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$21m for 2,000 Farmers in Karbala


A total of 25 billion Iraqi dinars [$21m] have been granted to farmers in Karbala in recent months to help them to increase their production, the director of the Karbala agriculture department said on Wednesday.

“The Karbala agriculture department has granted 2181 farmers agricultural loans worth more than 25.229 billion dinars,” Baher Ghali told Aswat al-Iraq news agency.

The loans include 5.253 billion dinars to 573 small farmers, in addition to 7.240 billion dinars to 746 farmers from the livestock wealth projects.

(Source: Aswat al-Iraq)

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Finance Minister Launches ID200b Project in Baghdad


Iraqi Finance Minister Baqer Jabr al-Zubaydi announced on Thursday that his ministry has earmarked 200 billion Iraqi dinars for the 10×10 project in the eastern Baghdad district of Sadr City, according to a press release.

“During a meeting with the municipal council of Sadr City, Zubaydi called for investing the sum this year in the preparation of designs for the project’s first stage,” read the release as received by Aswat al-Iraq news agency.

He stressed the importance of the Baghdad Mayoralty coordinating with the Budget Department during the next couple of weeks to place the project within the 2011 state budget.

( Aswat Al Iraq )

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A government of everyone and no-one


If a week is a long time in politics, it is a very long time in Iraq. The first day of this week in Iraqi politics witnessed a Sunday 23 May meeting between Iraqiyya leader Iyad Allawi and Grand Ayatollah Ali al-Sistani. On the same day, the Washington Post released a new interview with Prime Minister Nouri al-Maliki that gave excellent insight into the premier’s current mindset. So what’s going on behind the scenes and how far away  is the ratification of a new prime minister and cabinet of ministers?

The overarching trend is that we are headed towards a sprawling “unity’ government that might be described as “a government of everyone and no-one.” This means a government in which almost everyone is a participant to some extent, but no-one has signed on to an agreed manifesto regarding how the government will act. Such a government would not be a meeting of equals; a sub-set of three political coalitions would form the core of the government and would hold the balance of votes in the cabinet – the forum at which many key decisions would be made.

What are the indicators that point to this conclusion? The first and most important is the difficulty of getting Maliki and Allawi in the same room, despite behind-the-scenes US and Gulf Arab pressure to make such a meeting occur. For many policy-makers in Washington and the Arab world, the ideal solution would be a Maliki-Allawi tie-up. In theory, this would assure a strong federal state, a more favourable investment climate, cross-sectarian balance and curtailed Iranian influence. Personality and alliance dynamics, plus insistent prodding from Tehran, make it unlikely that a nationalist super-coalition will emerge.

In the absence of such a nationalist alliance, it is equally unlikely that Allawi’s primarily Sunni Arab bloc will be excluded from government completely. The United States, Ayatollah Sistani and the Kurds have all been vocal on the need for an inclusive government. On 23 May, Maliki noted: “How could the government be formed without Iraqiyya whether as a bloc or as Sunnis?” Maliki added a further inducement to Allawi’s bloc members, noting: “the Iraqiyya list and the Sunni component must be in the sovereign posts, not in secondary posts.”

The comment shows that Maliki retains a clear-headed appreciation of Allawi’s weaknesses. Maliki correctly divines that Iraqiyya is struggling to hold together and may be easy to fragment. On 23 May, the premier noted: “I read the real situation and I see Allawi’s path as difficult; he has many problems ahead of him. I don’t say that I have no problems but mine are less. I have a coherent list unlike the others. So, imagine the problems for Allawi and the others.” Maliki has been consistent in rebuffing all possibility that Allawi will lead a new government and the Sunday meeting between Allawi and Sistani failed to produce any favourable outcome for the Iraqiyya leader.

A greater challenge for Maliki is to reassure Shia, Kurdish and Sunni partners that he can be trusted to take a less authoritarian stance during a second term. Some elements of the pan-Shiite Iraqi National Alliance (INA) such as the Sadrists will require very significant inducements to accept Maliki as prime minister, including so-called “service ministries” such as health, labour and transport. The Kurds and Sunni Arab factions also have a strong bias against the premier. Though Maliki can offer many tempting pay-offs to allies in the form of ministries, there is an under-current of antipathy that suggests Maliki will be shunted aside at a very late stage in government formation and a more acceptable (and weaker) prime ministerial candidate placed atop the sprawling “unity” government.

Whether Maliki remains or is removed, the resultant government may be unlikely to emerge before the start of Ramadan in mid-August. Whenever the government does emerge, we can expect significant churn in the ministries, with most or all of the ministerial portfolios redistributed during the summer negotiations. The aforementioned sovereign ministries – Finance, Interior, Oil, Defence, Foreign Affairs – may be split between political appointees of five main factions. This could result in some favourable results for investors, such as an Iraqiyya or Maliki pragmatist in the Ministry of Oil or a Kurd in an Arab-KRG confidence-building role at the Ministry of Finance. The shuffle could also see unsavoury characters implanted in key positions. In the lottery of government formation, only one statement can be made in confidence — that many existing relationships will be rendered null and void, requiring the work of commercial positioning to begin afresh.

Profile

Dr Michael Knights is Vice President and lead Iraq analyst at Olive Group, the  first security company to operate in Iraq.  He has  worked on Iraqi political and security risks since the mid-1990s, first as an oil and gas journalist and later as an academic, receiving his PhD on Iraq at the Department of War Studies, King’s College London.  Since 2003, Dr Knights has run the Washington Institute for Near East Policy’s Iraq programme, advising US government agencies on Iraq policy and publishing a series of books on local politics and security in Basrah, Maysan, Dhi Qar and the northern provinces including Kirkuk.  Since joining Olive Group in 2006, he has produced in-depth social and political analysis of 26 of Iraq’s major oil and gas fields and keeps a close eye on national security and politics.

He can be contacted at mknights@olivegroup.com

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Fee Exemption for Jordan Certificates of Origin


Iraq’s embassy in Jordan on Wednesday issued new regulations that entail exempting Jordanian made products from the fees charged for ratifying the certificate of origin, bills and related documents as of April 14, according to a statement issued by the Ministry of Industry and Trade.

The regulations are in line with decisions of the Economic and Social Council of the Arab League in this regard, to be implemented on a reciprocal basis. Also in implementation of the decision, the Industry and Trade Ministry requested the Foreign Ministry to circulate copies of its circular in this regard to Jordanian embassies and consulates abroad to observe these instructions, said the statement.

( Jordan Times )

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Finance Minister to Invest Japanese Loan


The Council of Ministers authorized Finance Minister Baqer al-Zubaidi to discuss investing the rest of a Japanese loan with the Japanese ambassador.

“The council during its 15th session decided to authorize the minister to discuss investing the remaining amount of the Japanese loan (around $220 million) with the ambassador to determine the projects that could benefit from this amount,” Ali al-Dabbagh, spokesman of the Iraqi government said in a statement received by Aswat al-Iraq news agency.

The Japanese government presented a 3.5 billion Iraqi dinars loan. The Iraqi government used the loan to rehabilitate a fertilizer factory in Khour al-Zubeir, in addition to other projects.

( Aswat Al Iraq )

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Re-basing the Iraqi Dinar


The Central Bank of Iraq is planning to rebase the Iraqi dinar but hasn’t decided yet on the timing of the move, the bank said in a statement last week.  Affirms its commitment to its strategic projects, particularly knocking three zeroes from the Iraqi dinar,” the statement said.

“Despite the technical and logistical preparations for the project we have yet to decide on suitable timing to implement the project,” it said. Choosing a suitable time wouldn’t be linked to economic aspects only, but rather to the security situation as well, it added.

“Most commercial Insurance Policies for Iraqi risks have monetary amounts in US dollars” comments Rob Edwards, Chief Operating Officer of AAIB Insurance Brokers.  “And this goes for sums insured, indemnity limits, deductibles and premiums, so there will be little effect for the majority of policies.”

If the rebase decision is taken it means a current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.

Mr. Edwards continued, “Some policies written outside Iraq and the Kurdish Region of Iraq are for more modest sums insured, in particular auto exposures and these typically use Iraqi Dinar (ID) limits.  Underwriters and their reinsurers should keep a watching brief on this if they have policies with ID sums insured.”

Currency rebasing is usually monetarily neutral and is introduced to make commercial calculations easier and cheaper. Turkey, for example, knocked six zeroes off its lira currency in 2005. Russia did the same for its currency.

[Source: Zawya.  Full article here  http://www.zawya.com/Story.cfm/sidZW20100315000097/iq/?pass=1]

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Iranian bank opens branch in Basra


Iranian Bank has opened a branch in the southern province of Basra to facilitate money transfer between the two countries, the Iranian consul in the city said on Wednesday.

“The step aims to boost financial cooperation between Iran and Basra City…,” Mohammed Reda Baghban told Aswat al-Iraq news agency.   It will also activate Iranian investment projects in the city, the consul indicated.   The bank will be run under the supervision of Iraqi state-run banking institutions.

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Iraq Expects to Step up T-bill Activity in 2010


Iraq expects to step up its Treasury bill activity in 2010 to help plug continuing budget deficits and foster a secondary treasury market, the Central Bank and Finance Ministry said in a submission to the IMF.

Iraq, only just emerging from sectarian war but still battling a stubborn insurgency, also wants to develop foreign exchange markets outside the framework of dollar auctions currently conducted by the Central Bank.

That included the establishment of an interbank foreign exchange market and dinar forward market, the submission said.

The country’s letter of intent submitted to the International Monetary Fund for a $3.6 billion standby arrangement was dated Feb. 8 and can be accessed here

Iraq, which on Sunday held its second election for a full-term parliament since the 2003 U.S.-led invasion, said it would not return to a budget surplus until 2012.

(Newsweek, Inc)

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